GE talks center on money, ability to compete

DON'T MISS IT:

Join staff writer Jim Martin for a live chat about the GE Transportation situation. Monday at noon at GoErie.com

It's about money.

For GE Transportation, its plan to eliminate 950 union jobs in Erie is about cutting costs and closing what it says is a 20 percent productivity gap compared to the company's new plant in Fort Worth, Texas.

It's also about what company officials see as an emerging reality -- that GE Transportation's days as the uncontested leader in the freight locomotive business could be in jeopardy.

And it's also about the fact that its chief rival, Caterpillar Inc., is advertising for help at its locomotive plant in Muncie, Ind. -- for workers at $12 an hour and $14 for welders.

Money is also on the minds of about 3,500 members of Local 506 of the United Electrical Radio and Machine Workers, who thought two years ago this week that they had agreed on a four-year contract that would guarantee them rising wages for the next four years, but are now being asked to consider wage concessions for new employees.

And for union members, it's also about reconciling their own value at a GE business that earned more than $1 billion in 2012 and was named General Electric's Business of the Year.

And finally, for the union, it's about wondering what's changed -- why reinvent a company that's been providing both good wages and big profits?

The company, citing the confidential bargaining process, has been hesitant to speak to those issues.

But Barbara Chaffee, president of the Erie Regional Chamber and Growth Partnership, has offered some thoughts about what's changed as GE Transportation faces a capable and well-funded competitor in Caterpillar, which now owns locomotive builder Electro-Motive Diesel, or EMD.

GE has won accolades and awards for its fuel-saving Evolution locomotives.

But in recent months, Chaffee said, Caterpillar has won important contracts that GE Transportation had hoped to win.

"Let's say Company A sells a locomotive for X, and Company B sells it for $200,000 less. If you are a railroad company, you are going to buy the one that is less," Chaffee said. "You would be crazy not to."

She acknowledged that the paychecks of GE Transportation workers, who earn an average of more than $30 an hour, have been good for Erie.

But she also argues that the world has changed and so has GE Transportation's place in the marketplace.

"What worked yesterday or before that doesn't work for today, and what works today may not work for tomorrow," she said. "Global competition, technology revolution, and an ever-evolving marketplace means both the company and labor have to be willing to change, be nimble, make adjustments for survival and to thrive."

Like Chaffee, Erie County Executive Barry Grossman said Friday that he's hopeful that union leadership takes the long view and approaches the decision bargaining process, now in its final days, as "a team player."

"I think that is going to go a long way toward pushing the company one way or another. But I don't mean giving away everything (the union has) earned," Grossman said.

Grossman was careful on one point two months ago when he talked to Lorenzo Simonelli, chief executive of GE Transportation.

Grossman said he wasn't going out on a limb to urge the union to negotiate if the outcome of the process was a foregone conclusion. Simonelli, he said, was open to the possibility of substantially reducing the number of jobs that would be lost.

With just a week left in the negotiating process, Grossman said assurances from the company give him reason to be hopeful some good will come of nearly two months spent at the bargaining table.

Neither the union nor the company is saying much about those talks.

In a statement Friday, GE Transportation spokeswoman Jennifer Erickson said, "We offered a proposal to the union that helps us remain competitive and saves a significant number of jobs, and we hope they will work productively with us in negotiations to achieve the best outcome for the business, our employees and the community."

And while union President Scott Duke typically refrains from commenting on negotiations, the union's positions have been reaching the public through regular newsletter updates.

A union newsletter released Friday said the company has asked for a two-tier wage structure for new employees and is asking the union to agree to mandatory overtime, job consolidations and restrictions on job movement and bidding.

The union's reaction was not ambiguous.

Friday's newsletter called the proposal, "totally unacceptable."

In the newsletter Scott said that the proposal is "not good for us, and it's not good for the community."

He went on to say, "GE still seems intent on moving most of the 950 jobs."

Grossman offered a ray of hope, however, saying that his sources close to the negotiations said Friday that the tone of the negotiations seemed to be improving.

"I feel better than I did a week or two ago, because my sources are saying that now the company is at least negotiating about jobs," he said. "Before that it was not on the table."

But time is running out.

The bargaining process -- and an opportunity for the union and the company to come to terms -- ends Saturday.

JIM MARTIN can be reached at 870-1668 or by e-mail.

DON'T MISS IT:

Join staff writer Jim Martin for a live chat about the GE Transportation situation. Monday at noon at GoErie.com